Our analysis of all of the pertinent data on the ability of actinic light to modify the bacteriorhodopsin (BR) photocycle led to the conclusion that both heterogeneity and photocooperativity were involved in the phenomenon. Our previous work suggested that lipids of the purple membrane of H. holobium play a crucial role in the process. The current report describes two approaches, one chemical and the other physical which show that two specific classes of lipids, namely squalene and lipopolysaccharide sulfate, are most important. It is further shown, that the loss of these lipids is accompanied by protein conformational changes. Final proof of the role of lipids in the regulatory process was obtained by discovering conditions which enable the reconstitution of the native processes, lost by treating the purple membrane with detergent, in an incubation of the damaged membranes with sonicated lipids. An SVD-analyzed multichannel study of the kinetics and sequence of electron transfers from fully reduced cytochrome aa3 to O2 was completed. The main findings are 1.) There are 4 kinetic steps involved; 2.) The time constants of these are 0.01, 0.09, 1.1, and 30 ms; 3.) The 4 sequential events are: binding of O2, the transfer of 2 electrons from heme a3 and CuB to O2 and 1 electron from a to a3, and two separate transfers from a3 and CuA to O2; 4.) most of the O2 is held on CuB during its reduction; and 5.) The oxyferryl (Fe4+) state of iron is not an important intermediate.